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Kathmandu gains, hitting 19-month high

NZ NewswireNZ Newswire 4/08/2016 Sophie Boot

New Zealand shares gained after Kathmandu Holdings affirmed earnings would rise in line with its guidance. A2 Milk also advanced.

The S&P/NZX 50 index rose 20.69 points, or 0.3 per cent, to 7,298.09. Within the index, 24 stocks rose, 21 fell and six were unchanged. Turnover was $155.8 million.

Kathmandu led the index, up 5.8 per cent to $1.83, a 19-month high. The retailer said annual profit was between $33m and $34m, a gain of as much as 67 per cent, as better-run promotions widened its margins. The profit is within Kathmandu's upgraded June guidance of between $32m and $35m, which highlighted the retailer's better margins.

A2 Milk gained 2 per cent to $2.02. Stuart Williams, head of equities at Nikko Asset Management, which holds A2 Milk stock, said the milk marketer "still has the potential to have some pretty decent earnings numbers come out."

"It's not as mature as some of the other things we're looking at, and assuming management is successful at navigating some of the particular issues like China and labelling over the next few years, they still have very good growth prospects," Williams said.

Fletcher Building rose 1.8 per cent to $9.59. The stock has gained 28 per cent this year, with construction expectations stoking investor appetite.

Vector gained 1.7 per cent to $3.50 and Precinct Properties New Zealand rose 1.2 per cent to $1.27.

Ebos Group advanced 0.4 per cent to $16.56.

Heartland Bank was the worst performer, down 1.5 per cent to $1.35. Ryman Healthcare dropped 1.4 per cent to $9.22 and Air New Zealand fell 1.3 per cent to $2.275.

Outside the NZX, Suncorp's ASX-listed shares traded at A$13.34 at 5:30 local time, having gained 8.8 per cent so far this year.

Suncorp Group's New Zealand general insurance units Vero and AA Insurance lifted annual earnings as they benefitted from growth in more profitable motor business, although the local group is still focused on stripping out costs. The NZ insurance business's profit rose 12 per cent to $178m on a 3.2 per cent increase in gross written premium (GWP) to $1.34 billion in the 12 months ended June 30, Suncorp said in a statement to the ASX.

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